The price elasticity of demand for widgets at any particular price is determined by
a. whether widgets are luxuries or necessities.
b. how much of their budgets consumers spend on widgets.
c. whether there are any good substitutes for widgets.
d. All of the above are correct.
d
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Tying the salaries of top managers to the firm's stock price or to the profitability of the firm allows a firm's board of directors to
A) avoid disclosing financial statements to investors. B) eliminate moral hazard. C) increase asymmetric information. D) reduce the principal-agent problem.
Equilibrium is the condition that exists
A. when quantity demanded equals quantity supplied. B. when the demand curve intersects the price axis. C. when the demand curve intersects the quantity axis. D. whenever there is no government intervention in the market.